Ethnic retailing: Targeted formats expand amid shifting tastes, demographics.

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Some of the fastest-growing food-retailing chains in the country are those targeting ethnic groups such as Hispanics and Asians, as illustrated by the numbers in SN’s 2014 lists of the Top 75 Retailers and Wholesalers in North America and the Top 50 Small Chains and Independents.

The Top 75 list, published in January, includes Superior Grocers, based in Santa Fe Springs, Calif., which tallied an estimated $1.6 billion in sales from its 42 locations last year, nearly doubling in size over the last five years. It appeared as No. 60 on this year’s list.

Joining Superior Grocers among the Top 75 this year is Bodega Latina, based in Commerce, Calif., which made its debut on the list at No. 72. The company, a division of Mexico-based Grupo Commercial Chedraui, had estimated sales of $1.2 billion from its 45 locations.

On the Top 50 list, three of 10 largest small chains on the roster target Hispanic customers — Northgate Gonzales Market, No. 3 with an estimated $918 million in sales; Cardenas Markets, No. 5 with volume estimated at $856 million; and Vallarta Supermarkets, No. 7 with estimated sales of $800 million.

Other ethnically focused operators on the list that are showing growth include Sedano’s, a 33-store Hispanic operator based in Hialeah, Fla.; and Tawa Supermarket, Buena Park, Calif., operator of the 37-unit 99 Ranch Market banner seeking to serve Asian consumers in several states.

What many of these operators have in common is their increasingly broad appeal beyond the demographic they ostensibly target. Superior Grocers, for example, positions itself as a destination for bargain hunters of any ethnicity, but others may also be benefiting from the increasingly mainstream appeal of ethnic cuisines.

In an interview with SN about his projections for 2014, John Rand, SVP at the Cambridge, Mass., office of Kantar Retail, said a significant opportunity exists for traditional retailers to embrace a multicultural positioning that focuses on popular product, regardless of its ethnic origin.

“It’s about marketing to a group of people who have adopted that culture as their own,” he told SN. “The big win for both retailers and suppliers is what’s going to go mainstream.”

A clickable list of the 2014 Top 50 Small Chains and Independents

On the following pages, SN profiles four ethnic formats — two independents and two that are divisions of larger traditional supermarket companies — to show how they are evolving to meet the needs of their respective customers.

Basha’s Food City banner, with 48 locations in Arizona, has spawned innovations that have been adopted by its parent company in traditional Bashas’ stores. Food City often grills green chilies and chicken outside its stores, for example, a popular feature that’s been adopted by Bashas’. Bashas’ has also brought some larger, more visual product displays from the Food City EDLP format to the Bashas’ stores.

Rhee Bros.’ Assi Plaza, a six-store chain based in Hanover, Md., was founded as a concept offering Asian staples like rice, cooking oil and prepared Korean kimchee, and is working to maximize its appeal to different ethnicities and to second-generation Asian immigrants. “Today you’ve got modern [ethnic] concepts, modern equipment and you’re looking at products today that have English labels,” co-owner Robin Rhee said in an interview with SN.

Net Cost Market, based in New York, focuses on Eastern European fare — the items popular among the immigrants from Russia and Ukraine in the company’s home market of Brooklyn — but has expanded to become more a specialty retailer offering hard-to-find imports at affordable prices. Those include items from France, Germany, Italy, Bulgaria and Greece, as well as Eastern European states such as Ukraine, Russia and Latvia, and Uzbekistan in West Asia. In addition, Net Cost imports a large selection of herbs, spices and other products from India, China and Vietnam.

United Supermarkets’ Amigos banner is planning to open its first ground-up location in August in Hereford, Texas, but the concept could be expanded to other markets now that United has been acquired by Albertsons, Boise, Idaho. The planned Amigos store in Hereford will be the first in a market that does not have other United formats nearby and will seek to target a broad demographic. “This will be a fun, festive place to shop, for a wide range of guests,” said Juan Enchinton, director of Hispanic initiatives at United.

— Mark Hamstra

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